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I'm working on a story about how the 15,000 announced layoffs at Panasonic will affect their security division. Thus far, it looks like it won't affect it much at all.
As a teaser, though, here's J.M. Allain answering the following question:
Me: What is Panasonicâ€™s opinion of the North American security marketplace? Will it grow in 2009? Will Panasonic security grow in 2009?
Allain: The North American Security market should remain relatively strong throughout 2009. The majority of major projects slated for completion during the course of 2009 were put into motion prior to the economic conditions that prevailed in the fourth quarter of 2008. Although we do anticipate there will be budget reductions that will affect system expansion plans for existing installations, we remain cautiously optimistic that security will remain a priority across the private and public sectors. We anticipate growth for Panasonic System Solutions as a result of new product introductions we will be making throughout the course of the year that promise to deliver both enhanced value and performance â€“ exactly what our customersâ€™ are demanding during these tough economic times as accountability for all expenditures will be measured more closely than ever.

I had a great conversation with Dean Meyer yesterday and I thought I'd post some raw quotes. You'll see some of them in an edited version of the Pelco story on the front page, and some others of them in a little sidebar I'll put in the March paper.
Anyway, here you go:
Me: Why'd you close the access division?
Dean: â€œEveryone is seeing a slowdown. And I see no reason why thatâ€™s going to change in the first or second quarter of this year. Itâ€™s not just our industry, and thatâ€™s not earth shattering news.
â€œIn light of that situation, the short version of it is that [the access control business] represents a very, very small amount of our revenue, but we spend a lot of engineering resources on it, and so as times become more challenging, we say, â€˜Hey, we need to be more focused on what we know best, and that which contributes to the majority of our business: the cameras, and recording, and all the things that you know that we do. This is more about getting the whole team focused. And in all candor, [access control] was not something that just rolls off our tongue, and not something that everyone thought was easy to understand or embrace and really drive the sales. Itâ€™s a very small piece of our business, one on which we were spending more in R&D than we were getting in sales.
"And with the large number of product launches we'll have this year, to ask marketing and sales to worry about the small business of access, it was just a distraction that we didn't need. From a pure business standpoint it was an easy decision. In my mind, it was a bit of a struggle in another way, in that it provides a bit of a conflict in strategy. We do a good job with partnering with a lot of the access control providers. Weâ€™re very open with them, and we look for pull-through business with them, and this was a bit confusing to them once it became part of Pelco. They wondered, 'Are you going to start competing with us?' So we kept it a low-end entry-level thing, which didnâ€™t move well through our channel anyway. lt's more of a distribution channel vs. an integrator product. More of an add-on vs. a direct sale, although the access system could scale pretty well. But we always elected to position it as very low end because we didn't want it to compete with our strategy of partnering with the high end access providers."
Me: Can you tell me who's going to buy it?
Dean: â€œNo. But Iâ€™ve been surprised with how many people said, â€˜Hey, I might be interested.â€™â€
â€œIâ€™m confident that weâ€™re going to find a way to spin it off so that our customers will have a positive go-forward experience to have their installations sustained. Weâ€™ve had quite a few people come to us about it, and that will be good for customers. Itâ€™s not going to take a long time, either. I think weâ€™ll move fairly quickly.â€
Me: What about the market in general? How will it look a year from now?
Dean: "To a degree, I think it is a pretty, a very fragmented business, and we also know that Pelco has a lot of breadth in our offerings, and weâ€™re talking about getting more focused. We're fortunate in a couple of ways. Weâ€™re global, which helps us a lot. Not all markets are impacted the same way, and weâ€™re financially secure. So from a pure Pelco standpoint I feel quite good. I wonâ€™t speculate on our competitors, but I think it will do some separation. Some will handle more difficult times better than others. I think it will result in some consolidations, or depending on how band things get, there might be some who say, 'This doesn't make sense anymore.'
"Most people are going to continue to try to chase the money. Where is the money? Itâ€™s going to be where these stimulus packages all fall out. Is it infrastructure? Probably.
"It depends where ones strengths have been, as to whether you're going to definitely be successful getting through this.
"How far reaching are you? You can play differently if you have a global reach. Not all markets are being impacted the same way. Others still have fairly good growth, even though thatâ€™s slowed down. Weâ€™re trying to be prudent where the best opportunities are and Iâ€™m sure weâ€™re not unique in that regard. Everyoneâ€™s trying to figure out how to get through this. Itâ€™s a war.
"I think it will streamline the industry before itâ€™s all said and done."
Me: I read recently that angel investors are pulling their money back. Will that affect security?
Dean: "It will be interesting to see. A lot of niche companies many times advance the technology the fastest. Theyâ€™re the market leaders because theyâ€™re very focused. It will be interesting to see what we read about as the buzz next year. Start ups with new innovative approaches-will end users be willing to spend their money on them? I think customers will be less apt to take risks on the next new things-and Iâ€™m not talking about IP, that's not new anymore. It might bring our whole industry's focus back to, Where is the 80 percent? again. Weâ€™ll maybe get back to what the day-in-day-out needs are that drive the business, vs. some of the fringe stuff that some of, all of us, get enamored with sometimes.
"Our big message for 2009, and we had a really great sales meeting for our channel partners and our rep force in the U.S. a few weeks back, is that weâ€™re very excited about the breadth of offerings we're going to come out with, and the breadth of IP camera offerings. I donâ€™t think itâ€™s me speaking out of school to say we havenâ€™t necessarily been leading that aspect of the market, but weâ€™ll be right up there leading with the rest of them come ISC West, and that is very much our excitement for 2009.
"We donâ€™t hesitate to invest in technology and sales growth."

A story from ABC news affiliate WJRT in Flint, Mich. reports one city councilman pushing to assess false alarm fines against the alarm companies reporting alarms to police.
Councilman Sheldon Neeley claimed in the story to believe that fees, currently charged to end users, should be shifted to the alarm company since they are the one's responsible for verifying the alarm and reporting it to authorities. Also, Neeley believes, alarm companies will be more capable of absorbing the cost.
Critics, including Global Security owner Tonya Burns, of Neeley's proposal claim the added cost would simply be passed on to end users, anyway. "There are a lot of variables when you go into deciding what caused the false alarm. How can you label it [the alarm companyâ€™s fault] depending onâ€”for example in the city of Flint, we have a lot of vacant homes and the landlords donâ€™t heat the homes," Burns said. "They put security systems in them because they donâ€™t want the piping, the furnace, the items stolen out of them, but they refuse to heat it, and that sets off the false alarms."
stay tuned for updates on this story.

Here are a couple news items:
First: Tyco International, parent company of ADT and SimplexGrinnell, announced last night that one of its board of directors is leaving the Breen team for a post in the Obama administration.
Former Tyco director Admiral Dennis C. Blair was confirmed on Jan. 29 as U.S. Director of National Intelligence.
Here's a description of what the the U.S. Director of National Intelligence does: The Director of National Intelligence (DNI) serves as the head of the Intelligence Community (IC), overseeing and directing the implementation of the National Intelligence Program and acting as the principal advisor to the President, the National Security Council, and the Homeland Security Council for intelligence matters related to the national security. Working together with the Principal Deputy DNI (PDDNI) and with the assistance of Mission Managers and four Deputy Directors, the Office of the DNI's goal is to effectively integrate foreign, military and domestic intelligence in defense of the homeland and of United States interests abroad.
In a prepared statement Tyco CEO Ed Breen said

"We congratulate Admiral Blair on his appointment to serve our country as Director of National Intelligence in the new administration of President Obama," said Ed Breen, Tyco Chairman and Chief Executive Officer. "Admiral Blair has served our Board with distinction and dedication since 2003 and we thank him for his many contributions to Tyco."

Here's some more info on Blair from the press release: Admiral Blair (USN, ret.) joined Tyco's Board of Directors in 2003 and previously served as President and Chief Executive Officer of The Institute for Defense Analyses, a federally funded research and development center. Admiral Blair retired as Commander-in-Chief of the U.S. Pacific Command in 2002, after more than 34 years of service in the United States Navy.
And an unrelated item. Things are looking good stock-wise for Brinks Home Security according to investor.com. This snippet from yesterday.

Brink's Home Security (CFL) rose 3%. The recent IPO hit a new high after a pullback to its 10-week line. This is the third straight day of gains in above-average volume. It's Relative Strength line is at an all-time high. Brink's is in the No. 4-ranked industry group.

VES announced Feb. 3 it had launched a new Web site that it promises has more information and is easier to navigate than previous incarnations. VES also promises further enhancements like a secure Dealer Area. It sounds like they're also going to be looking for site user input in the form of articles about installation and project experiences dealers have had. Interested dealers can submit their stories through the site. Here's what the release had to say about it:

If you have a story to tell or a site of specific interest please let us know we will be happy to consider it for inclusion on the site in the future. Remember this is your site which shoud provide information which you need, if you have any suggestions on how we can improve the site in future please let us know

Okay, looks like we've added a bunch of relevant jobs to our job board. No longer is it just Brink's jobs. Yes, some security guard jobs have now made their way into the results, but we'll work on weeding those out.
Feedback is appreciated.

If only because I'm tired of posting bad news, here's some good news from EasyLobby, which makes visitor management software:

EasyLobby, Inc. Reports Record Revenue and Profitability for 2008
Company achieves over 40% growth versus 2007's record performance
Needham, MA (PRWeb) October 14, 2008 -- EasyLobby, the industry leader in secure visitor management software and photo ID badge printing solutions, today announced that sales and profit for its fiscal year ending December 31, 2008 were the highest in the company's twelve-year history.
"EasyLobby continues to be viewed as the industry leader in the increasingly important visitor management segment of the security market, as more and more businesses and organizations are realizing that the paper guest book sitting in their lobby is not providing sufficient or accurate information about who is in their facilities, or why," said Howard Marson, CEO.
The company processed a record number of orders from new and existing Fortune 2000 companies, local and federal government agencies, multi-tenant buildings, hospitals, colleges/universities and K-12 school districts, both here in the USA and abroad. The company also saw continued and accelerating interest in its ability to tightly integrate its SVMâ„¢ (Secure Visitor Management) software with over 30 different Access Control Systems, giving customers the best of both worlds without sacrificing any functionality.

Of course, they're not a public company and don't supply any real numbers...

Panasonic said it was shutting 13 manufacturing sites in Japan and 14 abroad by the end of March. It also plans to lay off about 15,000 workers, or 5 percent of its work force, by March 2010. Half of the cuts will be made in Japan.

Obviously, Panasonic is a huge company, and there's no real way to tell how the security division might be affected from that statement, but I'm going to put a couple emails out and poke around the Internet and see what I get.
It seems that this is mostly a consumer thing, though:

Panasonic, along with Mitsubishi Motors and Mazda, also joined the rapidly lengthening list of companies to sharply revise their full-year outlooks Wednesday, with Panasonic now projecting a net loss of 380 billion yen or $4.2 billion for the year ending March 31, rather than the 30 billion yen profit it forecast on Nov. 27. Mitsubishi expects a net loss of 60 billion yen and Mazda 13 billion.
The speed of the demand downturn in recent months has taken manufacturers and economists by surprise, and forced many companies to sharply lower profit warnings made only months or even weeks ago.

Basically, consumers, especially American consumers, just decided not to buy anything for a while. That might not directly affect security sales, which aren't really consumer driven. However, if you're trying to sell Panasonic video systems into retail, you might have a problem. Anything consumer-dependent is getting hammered right now.
In other bad news, the Times says Angel investors are shying away from start-up tech companies. That could be bad for continued innovation in the security technology.

Do alarm business in Virginia? The Virginia fire fighters union is hoping, once again, to raise revenue by taxing your alarm accounts.
Proposals currently in the Virginia General Assembly call for annual taxes on each monitored account of anywhere from $1 to $2.50 per account, per month. Yikes.
John Chwat, NBFAA's legislative guy, says they could raise "tens of millions of dollars" with this scheme. He notes that a similar measure passed the Senate in Virginia last year and was defeated with the help of the NBFAA and the VBFAA.
Chwat said that if this passes in Virginia, other states may look at implementing these kinds of fees.
What should you do? Call the General Assembly,
Here's the number and some talking points from the NBFAA
If you live in Virginia, call the General Assembly NOW and vote.Â During business hours, call the Constituent Viewpoint Opinion Line at 804-698-1990 or 800-889-0229 and a general assembly staff member will record your vote by bill number and forward the information to your representatives.Â If you have employees or subcontractors with whom you work, share this information and encourage them to call.
Â
If you do business or live in Virginia, visit, telephone, fax, email or text the members of the Virginia State Senate and House of Delegates who represent where you live, where your business is located, or for whom you are the security services provider and communicate your displeasure with turning an industry of mostly small businesses into tax collectors.Â Links are listed below.
Â
Tell them:Â
The bill is a "tax" on businesses and customers in the state
The fees originally envisioned covering just firefighters but has now increased to other state and local employees, increasing the bill's cost to the industry
There is no limit to the fees proposed-in just one month since introduction, fees in the bill to monitoring companies have jumped from $1.00 to $2.50 and they are now considering broadening this legislation to local employees
The legislation was not reported in 2008 despite passage in the State Senate
The state has no idea how many customers nor businesses will be impacted to pay for the benefits
It's unfair to single out one industry
The following are important links for contacting the Virginia legislature:
Â
If you are a resident of Virginia, you may follow this link to findÂ your specific Representative and/or Senator:
http://conview.state.va.us/whosmy.nsf/main?openform
Â
For those out of state, the following is a link to the House of Delegates and Senate member roster. You mayÂ click on each members name for further information:
Â
Representatives: Â
http://dela.state.va.us/dela/MemBios.nsf/MWebsiteTL?OpenView
Â
Senators:
http://sov.state.va.us/SenatorDB.nsf/$$Viewtemplate%2Bfor%2BWMembershipHome?OpenForm
Â
Link to Committee Pages:
http://legis.state.va.us/1_cit_guide/committees.html
Â
Link to House Appropriations Committee:Â
http://leg1.state.va.us/cgi-bin/legp504.exe?091+com+H02
Â
Link to Senate Finance Committee:Â
http://leg1.state.va.us/cgi-bin/legp504.exe?091+com+S05

HAGERSTOWN, Mdâ€”A public hearing held Feb. 3 found the Washington County Board of County Commissioners discussing a proposed false alarm ordinance. The ordinance as proposed looked to collect fines from consistent false alarm generators rather than punish, with a high yearly permit fee, all alarm users, most of whom, according to the Washington County Sheriffâ€™s Office, are not consistent repeat false alarm offenders.
Washington County Sheriff Douglas W. Mullendore said the ordinance passed, but not as originally proposed. â€œThere were some modifications to it. We did agree to drop the fee for the initial permit, and we also dropped the business permit, as well as the reinstatement fees,â€ Mullendore said. â€œIt permits us to do the false alarm violation fees. Those are still established at $30 for residential, $60 for business." Mullendore said the first two violations result in a warning, while the third violation is when the fees kick in, adding $20 per residential violation and $25 per business violation to the respective base fees up to a maximum of $100 per violation for residential and $200 per violation for business. A recent story in the Herald-Mail claimed that business fines were capped at $250, but the Washington County Sheriff's Office assures me that $200 is the correct number. The new ordinance will take effect Jan. 1, 2010. â€œThatâ€™s because weâ€™re in the process of doing a consolidated emergency communications center,â€ Mullendore said, â€œand we wanted to be sure that was up and running before we try to administer this.â€
According to Mullendore, permits will still be required but will have no associated cost. If alarm owners choose not to get the appropriate permit there will be additional fees to pay. â€œThere would be a response the first time,â€ Mullendore said. â€œThe second time, if [a business owner with an alarm system] still hasnâ€™t gotten the permit, then it would be $60 violation fee.â€
Mullendore said that to his knowledge there were no industry professionals present at the public meeting, held here at the Washington County Administration Building. â€œThere were a couple of citizens there, but we addressed all their issues prior to,â€ Mullendore said. â€œThere were actually no public comments whatsoever.â€